DiamondRock achieved great success in 2011. We executed on our strategic objectives. And as a result, DiamondRock continues to be a leading lodging REIT with exceptionally strong balance sheet and premium portfolio of high-quality hotels in top growth markets. Overall, we hold firm to our conviction that lodging fundamentals are in early stages of a recovery that will benefit the entire industry. However, we are particularly bullish on DiamondRock for several specific reasons. First, there's a lot of upside in our existing portfolio. To put our upside in perspective, if our portfolio only reaches prior peak levels of 2007, and we project much greater growth, that will mean that we will see $80 million in additional hotel EBITDA growth from last year's results, equivalent to 48% growth over 2011. Importantly, since our portfolio is forecasted to exceed prior peak occupancy in 2012, much of our future growth is coming from highly profitable increases in room rates. Second, after the disposition of the 3-pact hotels under contract Inland, which we expect to close very soon, the company will have completed over $1 billion of transformational hotel transactions since early 2010. After these transactions, the portfolio quality is even higher with 95% of our hotel profits coming from hotels located at gateway cities and destination resort locations. By all accounts, these urban resort markets will outperform the rest of the lodging industry over the next decade. We expect our portfolio weighted in New York City, Chicago and Boston to lead the way for the company going forward.

Third, our $45 million repositioning effort at Frenchman's Reef resort is substantially complete. We expect to exceed our original 2012 pro forma underwriting, our 2012 budget for Frenchman's reflects over $14 million in EBITDA growth from 2011 and the hotel's future funnel of booking continues to indicate that these coming years will be very successful. Fourth, we signed a term sheet with Marriott to convert one of our largest hotels, the Lexington Hotel in midtown Manhattan, from a Radisson to a member of the Marriott Autograph Collection. In connection with this rebranding effort, we plan to invest $30 million of incremental capital to upgrade the hotel. We anticipate significant rate potential arising out of this repositioning. Finally, with the completion of the sale to Inland and our Lexington Hotel financing, we will continue to maintain one of the most enviable balance sheets among our lodging peers, with 2012 debt to EBITDA of just over 4x, an undrawn corporate revolver, no corporate debt and significant cash. Our balance sheet strength gives us ample dry powder to be opportunistic in the acquisition market.

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